McDonagh v Huxley (No. 4)

[2021] NSWSC 987

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

McDonagh v Huxley (No. 4) [2021] NSWSC 987

Hearing dates:

26, 27, 28, 29 March 2018; 3, 4, 5, 6 April 2018; 8 May 2018; 20 June 2018; 20 August 2018; 13 December 2018; 5 March 2019; 27 September 2019 (and June 2020, resolution of personal costs orders)

Date of orders:

05 August 2021

Decision date:

05 August 2021

Jurisdiction:

Common Law

Before:

Lonergan J

Decision:

See par [557]

Catchwords:

CONSUMER LAW – unconscionable conduct – misleading and deceptive conduct

TORTS – conversion – deceit – negligent misstatement

Legislation Cited:

Australian Securities and Investments Commission Act 2001 (Cth)

Bankruptcy Act 1966 (Cth)

Competition and Consumer Act 2010 (Cth)

Corporations Act 2001 (Cth)

Evidence Act 1995 (NSW)

Legal Profession Uniform Law (NSW)

Transfer of Land Act 1958 (Vic)

Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

Adler v Australian Securities and Investments Commission (2003) 179 FLR 1; [2003] NSWCA 131;

Argy v Blunts (1990) 94 ALR 719; [1990] FCA 57

Briginshaw v Briginshaw (1938) 60 CLR 336; [1938] HCA 34

Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592; [2004] HCA 60

Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465; [1963] 3 WLR 101; [1963] 2 All ER 575

In the Matter of Idylic Solutions Pty Ltd - Australian Securities and Investments Commission v Hobbs [2012] NSWSC 1276

In the Matter of McDonagh Management Pty Limited [2019] NSWSC 1099

In the Matter of ACN 063 346 708 (formerly known as South Passage Pty Limited) [2018] NSWSC 1709

Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8

Kakavas v Crown Melbourne Ltd (2013) 250 CLR 392; [2013] HCA 25

McDonagh v Huxley [2018] NSWSC 1316

McDonagh v Huxley (No 2) [2018] NSWSC 1317

McDonagh v Huxley (No 3) [2020] NSWSC 1181

Neat Holdings Pty v Karajan Holdings Pty Ltd (1992) 110 ALR 449; [1992] HCA 66

Morley v Australian Securities and Investments Commission (No 2) (2011) 83 ACSR 620; [2011] NSWCA 110;

Paciocco v ANZ (2015) 236 FCR 199; 321 ALR 584; [2015] FCAFC 50;

Polon v Dorian [2014] NSWSC 571

Schellenberg v Tunnel Holdings Pty Ltd (2000) 200 CLR 121; [2000] HCA 18

Tillett v Varnell Holdings Pty Ltd & Ors [2009] NSWSC 1040

Thorne v Kennedy (2017) 263 CLR 85; [2017] HCA 49

Tonto Home Loans Australia Pty Ltd v Tavares; Firstmac Ltd v Di Benedetto; Firstmac Ltd v O'Donnell [2011] NSWCA 3893

Turner v Windever [2005] NSWCA 73

Wu v Ling [2016] NSWCA 322

Yorke v Lucas (1985) 158 CLR 661; [1985] HCA 65

Category:

Principal judgment

Parties:

Sharon McDonagh (First Plaintiff)
McDonagh Management Pty Ltd (Second Plaintiff)
Gregory Huxley (First Defendant)
Vanessa Huxley (Second Defendant)
Adam Huxley (Third Defendant)
Rory McDonnell (Fourth Defendant)
DIB Lawyers Pty Ltd (Fifth Defendant)
James Edward Spencer (Sixth Defendant)
Jeffrey Dougal Dawson (Seventh Defendant)
Vangory Holdings Pty Ltd (Eighth Defendant)
Vangory Services Pty Ltd (Ninth Defendant)
Benitch Investments Pty Ltd (Tenth Defendant)
Ghassan Dib (Eleventh Defendant)

Representation:

Counsel:
R Goodridge; P Braham SC with R Goodridge on 13 December 2018 and 5 March 2019 (Plaintiffs)

E Ball in March and April 2018; R Hii on 20 June 2018; A Katsoulas on 13 December 2018; D Allen on 5 March 2019 (First, Eighth and Ninth Defendants)

D Lloyd; M Kalyk on 13 December 2018 (Third, Fifth and Eleventh Defendants)

G P McNally SC (Seventh and Tenth Defendants)

Solicitors:
Firths Lawyers (Plaintiffs)

Mullane & Lindsay Lawyers (Third, Fifth and Eleventh Defendants)

Lillas & Loel Lawyers up to March to April and June 2018; Kekatos Lawyers December 2018 to March 2019 (First, Eighth and Ninth Defendants)

Kent Attorneys (Seventh and Tenth Defendants)

File Number(s):

2014/311738

Judgment

1. The first plaintiff, Sharon McDonagh, and the second plaintiff, McDonagh Management Pty Limited (“McDonagh Management”), (a superannuation fund set up on Ms McDonagh’s behalf), commenced proceedings in 2014 against 11 named defendants. They claim that the defendants, by a combination of fraudulent representations and dishonest activities, executed a plan in late 2013 to dupe Ms McDonagh (and her company) into making unsecured loans to two insolvent companies, Griffith Estates Pty Ltd (“Griffith”) and Beechworth Land Estates Pty Ltd (“Beechworth”) that deprived her of $600,000.

2. It is alleged that these events occurred with manipulative urgency in November 2013, shortly after the defendants became aware that Ms McDonagh had received over $600,000 in settlement money from a personal injury claim.

3. Because of the prolix way that the Amended Statement of Claim has been pleaded, it is difficult to succinctly summarise the bases of the plaintiffs’ case. The pleading extends to over 100 paragraphs. Some of the bases are pressed against only some of the defendants. Some of the asserted grounds for relief are tenuous, inadequately or inappropriately pleaded and/or clumsily expressed. Some “counts” were abandoned at the trial, leading to the filing of a Further Amended Statement of Claim which apart from abandoning counts 23 and 24 regarding injunctive relief, remained otherwise the same.

4. In the opening by counsel for the plaintiffs at trial, voluble descriptions of conduct were attributed, the activities termed a “scam in which all defendants participated”, setting up a scheme to give the appearance of legitimacy and independent advice, rushing Ms McDonagh into setting up a superannuation fund (McDonagh Management) and making loans to insolvent companies of which the family of the first and second defendants were “beneficial owners”. It was asserted that a package of documents was created that was “full of legalese”, purporting to secure the loans of $600,000, but security was not achieved, and the documents were never registered.

5. The scattergun approach to the legal bases for relief, listed as 22 separate “counts”, include conversion, breach of guarantee, unconscionable conduct because Ms McDonagh had a “special disadvantage”, negligent misstatement, deceit, misleading and deceptive conduct and various breaches of the Competition and Consumer Act 2010 (Cth), Sch 2 - Australian Consumer Law, the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act), and the Corporations Act 2001 (Cth).

6. There is a claim for exemplary damages made against Gregory (Greg) Huxley, Vanessa Huxley, Rory McDonnell, Ghassan (Gus) Dib and James Edward Spencer (Mr Spencer), although in the closing submissions this claim was confined to Greg Huxley and Rory McDonnell only. There is a single count of admission and guarantee made against Gregory Huxley arising from correspondence in 2014.

7. Default judgment for “liquidated damages” was entered against Vanessa Huxley and Rory McDonnell on 19 February 2016 by Registrar Bradford pursuant to a Notice of Motion filed on behalf of the plaintiffs. The Registrar initially entered judgment against each of them in the sum of $1,098,183.60 but in August 2018, he corrected that judgment under the “slip rule” (Uniform Civil Procedure Rules 2005 (NSW), r 37.17) to remove the $250,000 exemplary damages that had been initially included in the default judgment sum.

8. Vanessa Huxley has taken no part at all in the proceedings.

9. Rory McDonnell did nothing until June 2018 and then made two belated and unsuccessful applications to set aside the default judgment, one filed on 20 June 2018 after the evidence had been heard and submissions had been completed, and then another, in November 2018, three months after rejection of the first application.

10. The first application was heard and determined on 20 August 2018; McDonagh v Huxley [2018] NSWSC 1316 (an application for adjournment) and McDonagh v Huxley (No. 2) [2018] NSWSC 1317 (rejection of the application to set aside default judgment). The second was, with the consent of all involved having been filed in the midst of a plethora of other applications, decided on the papers in Chambers: McDonagh v Huxley (No. 3) [2020] NSWSC 1181.

11. Mr Spencer, (the sixth defendant), took no active part in the proceedings and as I understand it, was both at the time of trial and now, an undischarged bankrupt. An appearance was initially filed on his behalf by Kent Lawyers. It was formally withdrawn, with leave, on 20 June 2018 just before the closing oral submissions were made. The reasons for that leave being given appear from the record and are further canvassed to the extent necessary in dealing with Mr Spencer’s bankruptcy and the absence of leave to proceed against him under the Bankruptcy Act 1966 (Cth).

12. Mr Ball of counsel appeared for Greg Huxley, Vangory Holdings Pty Ltd and Vangory Services Pty Ltd, (the “Huxley parties”) instructed by Lillas & Loel Lawyers during the hearing in March and April 2018. Mr Hii appeared for these parties on 20 June 2018. In December 2018 Mr Katsoulas appeared, instructed by Kekatos Lawyers, and in March 2019, Mr Allen appeared instructed by Kekatos Lawyers. Kekatos Lawyers subsequently filed a Notice of Ceasing to Act on 5 June 2019.

13. Mr Lloyd of counsel appeared for Adam Huxley, Dib Lawyers, and Gus Dib (the “Dib Lawyer parties”) throughout the proceedings and interlocutory hearings.

14. Mr McNally SC appeared for Jeffrey Dawson and Benitch Investments Pty Ltd (the “Dawson/Benitch parties”) throughout.

15. All of the active defendants deny liability to the plaintiffs and vigorously disputed all allegations. At the beginning of the trial, the plaintiffs confirmed they did not press their case against the fifth defendant. Exception was taken to the expansive opening provided by counsel for the plaintiffs, Mr Goodridge, because it was far wider than the pleadings set out in the Amended Statement of Claim. Needless to say, the case will be determined on the pleadings, not the opening submissions. No leave to amend was sought at that stage. The positions of the defendants was set out in their written submissions received by the Court on day three of the trial, 28 March 2018, and as articulated in opening oral submissions that counsel made at the Court’s invitation.

16. Various interlocutory applications interrupted and delayed completion of the proceedings. Some of these interlocutory disputes were the subject of ex-tempore judgments, some evaporated soon after they were commenced and others, (notably the October 2018 Notice of Motion filed by the Huxley parties and heard in March 2019), were commenced but then withdrawn after some hours of cross-examination and argument, with costs, and a personal costs orders sought against the solicitors, Kekatos Lawyers, then acting for the Huxley parties. This issue of the personal costs orders was the subject of various countering affidavits, submissions and directions, and was ultimately resolved between the parties in June 2020.

17. McDonagh Management was also the subject of reinstatement proceedings in the Equity Division of this Court. This is because of machinations behind the scenes, apparently by Gregory Huxley and some of his associates, found to be suspect by Rees J in: In the Matter of McDonagh Management Pty Limited [2019] NSWSC 1099. In the context of a discussion of the facts of In theMatter of ACN 063 346 708 (formerly known as South Passage Pty Limited) [2018] NSWSC 1709, her Honour described the circumstances here as “…a far more elaborate series of attempts to frustrate the processes of the Court by twice lodging Change of Company Details forms with ASIC without the knowledge or consent of the sole director and shareholder of the company, Ms McDonagh”.

18. Those machinations included a solicitor from Kekatos Lawyers attending Long Bay prison in October 2018 to see a Mr Steven Vickers, the second replacement director, secretary and shareholder of McDonagh Management, where he was serving a sentence of three years imprisonment for dealing with property suspected of being proceeds of crime, to have him execute a Deed of Release purporting to release the Huxley and Dawson parties from any liability to McDonagh Management in these Common Law proceedings.

19. Unsurprisingly, Rees J found it just to reinstate the company and to make ancillary orders to ensure that Ms McDonagh regained control of her company and so that “…on reinstatement, Mr Vickers and whoever stands behind him cannot easily repeat their mischief under the guise of his position on reinstatement as sole director and shareholder of the company”: [44].

20. The asserted roles of each defendant will be explained in the following outline of the plaintiffs’ case, but to briefly introduce them, the first and second defendant, Gregory and Vanessa Huxley were friends of Ms McDonagh.

21. The fourth defendant, Rory McDonnell was a person introduced Ms McDonagh by Gregory Huxley to assist her in setting up a superannuation fund and a loan facility that would provide her with competitive interest payments.

22. The third defendant, Adam Huxley (referred to in this judgment as “Adam”) is Greg Huxley’s son, a paralegal at Dib Lawyers Pty Ltd.

23. The fifth defendant, Dib Lawyers Pty Ltd was incorrectly named as a defendant and by consent, a verdict is to be entered in its favour with no order as to costs.

24. The sixth defendant, Mr Spencer is a bankrupt who took no active role in these proceedings and never filed a Defence. He took on the role of guarantor in respect of both the Beechworth and the Griffith loans made by Ms McDonagh and McDonagh Management. He also signed loan documents as the Director/Secretary of Griffith and Beechworth.

25. The seventh defendant, Jeffrey Dawson, was a director of Vangory Holdings and Vangory Services at the time of the transaction and a long-time friend of Greg Huxley. He was also the director of Benitch Investments (the tenth defendant).

26. The eighth defendant, Vangory Holdings is a company that was set up in August 2006 with Jeffrey Dawson and Vanessa Huxley as directors. Vangory Services was incorporated on 24 November 2013. Mr Dawson was a director of both Vangory Holdings and Vangory Services at the time of the transaction, but was not a shareholder.

27. The eleventh defendant, Gus Dib, is a solicitor, the principal of Dib Lawyers and was the employer of Adam. It is accepted that as such he is vicariously liable for any acts or omissions on the part of Adam.

The Plaintiffs’ Case

(a) Affidavit and other evidence and pleadings regarding special disadvantage

28. The allegations have been extracted from the Further Amended Statement of Claim filed in Court with leave on 4 April 2018 and Ms McDonagh’s affidavit dated 23 June 2016 that was tendered as her evidence in chief, as well as, to the extent relevant, some of the medical reports tendered in support of the allegations of special disadvantage, and documents tendered in the Court Book said to evidence the transactions in issue [1] .

    1. Exhibit A, Plaintiffs’ three volumes tender bundle of documents and evidentiary material

29. Ms McDonagh was born on 9 May 1958 and so was almost 60 years old at the time she gave evidence at trial. She had attended school to year 11, completing her HSC at TAFE. She is the mother of five daughters, who were aged 23 to 45 years old at the time of trial. [2]

    2. Exhibit D, Affidavit, Sharon McDonagh dated 23 June 2016 at par 8

30. Ms McDonagh says that she “began working in accounts and administration work” in the real estate industry and later worked as a qualified and licensed real estate agent. There is no evidence of the date or nature of her qualifications, nor is there a detailed history of her employment in evidence.

31. In October 2010, she “recommenced full-time employment” as a real estate agent in Balmain. [3]

    3. Exhibit D, Affidavit, Sharon McDonagh dated 23 June 2016 at par 11

32. On 3 June 2011, aged 52, Ms McDonagh was hit by a utility and sustained a number of injuries including a laceration to her forehead, a right periorbital haematoma and a fracture to her nose and right orbit. She was admitted to hospital. There was apparently some concern about the nature and extent of the injuries to her head. She underwent CT scans which showed a subdural haemorrhage that was resolving on repeat CT some days later. Post traumatic amnesia testing was performed at the hospital. Reports tendered concluded that Ms McDonagh performed normally in that testing. She was discharged five days after the accident, (not eight days as she asserts in her affidavit), with follow up plans which included a repeat CT brain scan and neurosurgical review.

33. In her affidavit, Ms McDonagh described her injuries as “severe brain and head injuries” and claims that she “underwent extensive medical treatment for my severe brain injury and physical injuries”. It is evident from the medical and hospital records tendered [4] that her subdural haemorrhage did not require operative treatment. She says that after discharge from hospital, she and her youngest daughter stayed at the Huxley’s St Ives home for two to three weeks and that Vanessa Huxley provided her with care.

    4. Exhibit A, Plaintiffs’ three volumes of tender bundle of documents and evidentiary material, Volumes 1 and 3

34. Ms McDonagh says she returned to full time employment as a real estate agent on 22 August 2011. She says that she found it difficult to work, and could not cope with the stress of juggling multiple tasks, she had memory and cognition issues, and within three weeks of her return left the job because she was unable to perform the necessary tasks. [5]

    5. Exhibit D, Affidavit, Sharon McDonagh dated 23 June 2016 at par 37

35. She changed employment and worked from December 2011 to February 2012 at Devine Real Estate, but says she was unable to continue. [6]

    6. Exhibit D, Affidavit, Sharon McDonagh dated 23 June 2016 at par 38

36. Ms McDonagh reported to various practitioners who assessed her in 2011, 2012 and 2013 that she suffered from anxiety and panic attacks since the accident, as well as headaches, dizziness and memory problems.

37. A psychologist, Derya Gucel, provided a report dated 5 April 2012 stating that Ms McDonagh had been referred to her by her GP for treatment for anxiety and depression symptoms that developed after the accident. Ms McDonagh commenced treatment with Ms Gucel in August 2011 and ceased in November 2011 because her symptoms were reportedly “more manageable”. Ms McDonagh reported that she was later unable to continue in her employment and in early 2012 her symptoms deteriorated and she returned for more treatment. The report referred to consultations between August 2011 and 29 March 2012. Ms Gucel concluded that Ms McDonagh would meet the diagnosis for post-traumatic stress disorder and “major depressive disorder single episode” and that she has severe psychological symptoms as a result of the motor vehicle accident and that her difficulties were chronic in nature but she may continue to achieve fluctuating progress in her psychological state.

38. Dr Sarah Lucas, a neuropsychologist, carried out cognitive and other neuropsychological testing on 5 June 2012. She concluded that compared with Ms McDonagh’s high-average premorbid intellectual function, she had ongoing problems, including mildly reduced processing speed, moderately reduced free delayed recall of new material but much better recognition, suggesting Ms McDonagh had sound retention over time. She had poor planning and organisation, but sound performance in relation to other executive functions. Dr Lucas concluded that Ms McDonagh had sustained a significant traumatic brain injury, (TBI), as evidenced by her fractured skull and small subdural haematoma, referring to this as a “complicated mild head injury”. Dr Lucas noted that in the 12 months after this injury, Ms McDonagh continued to experience mild to moderate cognitive changes evident on neuropsychological testing and that these were broadly in keeping with the ongoing effects of TBI which has likely caused some mild cognitive changes, but is markedly exacerbated by her anxiety on a day-to-day basis. Dr Lucas concluded that Ms McDonagh should be reassessed to determine her longer term outcome and work capacity and that her memory and day-to-day cognition will improve as her anxiety symptoms improve, but there still may be longer term mild cognitive problems that will need to be assessed.

28. Dr Bywater, psychologist, provided a short report dated 13 June 2012. She noted that Ms McDonagh had been referred by her GP for symptoms related to cognitive impairment, anxiety and difficulty coping following a motor vehicle accident approximately one year ago. Dr Bywater referred to Ms McDonagh providing a history suggesting that she had a high level of psychosocial functioning prior to the accident and had returned to full-time employment as a real estate agent following separation from her husband and that she felt happy and settled in her job and was not experiencing any difficulties. Following the accident however she had poor concentration and memory problems, could not do her job and needed to keep a very detailed diary to aid her memory. Ms McDonagh reported cognitive difficulties that were affecting her relationships and that she had problems following conversations and recalling recent events. She also had panic attacks. Dr Bywater concluded based on the interview that Ms McDonagh had experienced a “significant and pervasive change” in the level of her psychosocial functioning since the accident and that what she described indicated that she had experienced significant cognitive impairment consistent with the head injury. Dr Bywater recommended cognitive behavioural therapy to assist with anxiety, and behavioural strategies to help with the psychosocial changes she has experienced since the accident.

29. In a follow up report dated 16 October 2012, Dr Bywater said that Ms McDonagh still reported becoming frequently overwhelmed, and feeling anxious when her memory and concentration adversely affected her ability to complete everyday tasks. However, her mood seemed significantly better in session and she was no longer tearful or showing the severity of concentration and memory difficulties that she had presented with initially.

30. Dr Alan Lam, a consultant in rehabilitation medicine, reviewed Ms McDonagh on 11 December 2012. He noted that there had been a couple of attendances at Royal Prince Alfred Hospital Emergency Department in June 2011 with panic attacks. He noted Ms McDonagh had difficulty coping with work stress where there was a need to juggle multiple tasks and that she reported cognitive issues such as impaired short term memory and that was why she said she could not continue in that employment. Ms McDonagh also referred to undertaking some study (after her second three month trial as a real estate agent) but found it difficult to concentrate and retain new information. Dr Lam recorded that the major issues and concerns related to cognitive difficulties especially short-term memory, and anxiety and panic attacks. He noted that Ms McDonagh had good attention and concentration span but there was evidence of impaired short-term memory. He considered that Ms McDonagh still suffered from significant cognitive difficulties which may be exacerbated by the emotional impact of the motor vehicle accident, made worse by a loss of self-esteem from not being able to work as she used to as a real estate agent. He thought that there should be ongoing psychological or psychotherapy assistance to address the anxiety and panic attacks or perhaps a psychiatrist to assist and to consider anti-anxiety medication. He also stated that if these things could be adequately addressed, Ms McDonagh should then be able to pursue paid employment in the real estate industry or be retrained to a different location.

31. Dr Bowers, a rehabilitation specialist, performed a Motor Accidents Authority General Assessment on 10 April 2013. He carried out a document review, recording the history given to Dr Lucas amongst others, and noted the CT of the brain on 3 June 2011 showed a left subdural haematoma and the CT of her facial bones showed a displaced fracture of the right orbit. He noted various assessments including a report by Dr Pope dated 27 July 2011 which referred to a possible post-accident loss of consciousness but no history of seizures. At that stage Dr Pope reported some short-term memory deficit which was mild and that Ms McDonagh was alert and oriented on examination and her speech was normal. The later CT on 20 July 2011 had shown complete resolution of the subdural haematoma with no mass effect or oedema. Dr Pope at that point (July 2011) thought Ms McDonagh had recovered well from her injuries. Dr Bowers set out a series of determinations under the Motor Accidents Act regarding permanent impairment and to the extent relevant for these proceedings, he thought that the information available indicated that Ms McDonagh’s complaints were “consistent with emotional behavioural disorder on a psychological basis rather than associated effects of any TBI”. He concluded that this was consistent with the neuro-psychometric testing results of Dr Lucas.

32. The last relevant medical professional in the reports tendered who made observations of Ms McDonagh’s cognitive abilities was psychiatrist, Dr James Maguire. He assessed Ms McDonagh on 26 April 2013. At that time she complained mainly of “significant memory problems”. Having considered the reports outlining her history and having reviewed her, Dr Maguire concluded:

“Ms McDonagh outlined a range of psychological symptoms consistent with her developing a Chronic Adjustment Disorder with Anxiety and Depressed Mood. This is [not] in response to the presence of any genuine physical problems but more importantly her belief and perception that she has significant cognitive difficulties as a result of a head injury. As noted, psychologist Dr Lucas considered that ‘her anxiety is having a detrimental effect on her cognition’. One also notes that Dr Lee in a referral letter to psychologist to Ms Guzel observed that Ms McDonagh’s four older daughters “are not supportive” and that she had ‘received marital counselling/breakdown a few years ago’. As a result of her reported cognitive problems, Ms McDonagh has been able to keep her youngest daughter home from school as her carer. In a situation like this a patient can unconsciously exaggerate difficulties in order to obtain emotional support and attention that might not otherwise be available. One needs to stress that it is not being suggested that Ms McDonagh is ‘malingering’ but that her level of cognitive impairment is likely to be more related to emotional difficulties rather than the effects of a brain injury.

A better understanding of Ms McDonagh’s emotional state at the time of the accident occurred would be aided by access to the clinical records of the general practitioner and psychologist who saw her in the period related to the breakdown of her marriage.

In the interim, one would recommend Ms McDonagh be referred to a psychologist who has some expertise in counselling patients with a mild traumatic brain injury. 12 sessions at a current recommended fee of $220 per visit would seem appropriate.

On her current history, Ms McDonagh is psychologically limited in her ability to resume her previous employment until she has undergone appropriate further treatment”.

44. In a further report dated 17 June 2013 in response to specific questions, Dr Maguire said this:

“You have asked me to comment on the claimed requirement for funds management. This would appear to be on the basis that Ms McDonagh has organically based cognitive difficulties which impair her ability to make rational judgments. The question in relation to a possible organic basis for her problems still remains one for the neurosurgeons and neuropsychologists. With an appropriate anxiety management plan, there are no rational grounds for concluding that Ms McDonagh in the long term will not be able to manage her own funds. As mentioned in my first report, she may well have a strong unconscious ‘need’ to behave as if she has a significant degree of impairment in order to maintain the support of her daughter given the history of estrangement from her other daughters.

The question about her future earning capacity will depend on whether her current level of impairment is primarily due to an organic brain injury or whether it is due to an anxiety disorder. Anxiety disorders can be treated with appropriate counselling and medication where needed. The same can be said about her requirement for domestic assistance. One does not see any reason why she requires domestic assistance as a result of any psychological condition particularly if she has had appropriate counselling”.

45. In her affidavit Ms McDonagh stated her perception that as a result of the accident “and the significant brain injury that I sustained, I began to suffer from a number of significant symptoms and disabilities that I had never experienced before in my life”. [7] She goes on to state what she perceives her current problems to be as at June 2016:

    7. Exhibit D, Affidavit, Sharon McDonagh dated 23 June 2016 at par 18

“[19] I now suffer from significant problems with short term memory, long term memory and problem solving abilities.

[20] I am completely unable to remember basic daily tasks or activities unaided. As a result, I must prompt myself by creating notes and alarms on my mobile phone. These alarms can be for something as simple as remembering to pick up milk or to be somewhere at a particular time if I had made a previous appointment. I will check my phone multiple times throughout the day in order to continue to remind myself of my upcoming daily activities.

[21] I have difficulty with communication as I will often be unable to finish a sentence as I simply forget what I was trying to say mid-way through. I often get stuck for words and as a result I cannot articulate myself properly.

[22] My thinking speed has also been dramatically reduced. As a result of the accident I am unable to comprehend detailed concepts and I am unable to perform basic problem solving anywhere near what I was able to perform prior to the accident.

[23] I confirm that in the 3-4 years following the accident my trouble with short term and long term memory was particularly bad, however, I continue to suffer from significant problems with recall. For example, I continue to have difficulty remembering my own children’s names and their order of birth. I struggle to properly attribute past events involving my children to the correct child.

[24] As a result of the accident I also suffer from significant anxiety and panic attacks. When I become forgetful and disorientated I feel incredibly anxious. In the 3-4 years following the accident I suffered from very severe anxiety as a result of my significant ongoing symptoms”. [8]

8. Exhibit D, Affidavit, Sharon McDonagh dated 23 June 2016 at pars 19-24

46. In August 2013 Ms McDonagh settled her case against the driver of the car for $900,000 inclusive of costs. She was represented by a firm of very experienced personal injury solicitors who did not appoint a tutor for the proceedings, nor does it seem that they arranged for Ms McDonagh to have any financial advice on the basis of her asserted cognitive difficulties. After legal expenses Ms McDonagh received a cheque for $679,003.82 [9] by letter of 13 August 2013. [10]

    9. Exhibit D, Affidavit, Sharon McDonagh dated 23 June 2016 at par 27

    10. Exhibit GD3, Letter of Firths to Ms McDonagh dated 13 August 2013

(b) The conduct of the Defendants complained of in the Further Amended Statement of Claim

47. Ms McDonagh had been friends with Greg and Vanessa Huxley for some years. She described in her affidavit being close friends with Vanessa and regularly being invited for dinners and parties and minding their home when the Huxleys were overseas.

48. The Further Amended Statement of Claim alleges that Greg and Vanessa Huxley represented themselves to her as people who were “financially knowledgeable” and able to assist her with financial management of her damages, although Ms McDonagh’s affidavit stated that it was Greg Huxley who represented himself as knowledgeable, and that Vanessa, his wife, “agreed” with what he said.

49. There is a gap between what is alleged in the Further Amended Statement of Claim, and what Ms McDonagh says in her affidavit:

“[43] I confirm that I spoke with Vanessa and Greg Huxley about the settlement and the money that I had been awarded as I trusted them and I thought of Greg as a “business man”. I had this impression of Greg as he often said words to the effect of “You don’t get to be as successful as me in business without knowing what you are doing”. I knew nothing of Greg’s then current and past bankruptcies and the bankruptcy of Adam Huxley was when I was told this by my solicitor at about the time these current proceedings were commenced.

[44] I confirm that following my years of friendship with both Vanessa and Greg Huxley I thought of them as being very trustworthy and caring people as they had cared for me so well following the accident.

[45] I recall that it was Greg Huxley who first suggested investing the money. He said words to the effect, “You don’t want to put your money in a bank. You will be lucky to get $2,000 per month and worse still you will have to pay full tax on that. I can arrange for $600,000 of your settlement money to be invested so that you will receive enough money in interest for you to live on. In fact with $600,000 of your money you will receive $6,000 per month and it will be set up in such a way that you will minimise your tax”. This was said to me in front of Vanessa. Vanessa did not interrupt Greg other than to say words to the effect, “You should trust Greg. He knows what he’s doing”. I recall that at this time Vanessa stopped having conversations with me about the settlement and about any conversations that Greg Huxley and I had. I remember thinking at the time that Vanessa appeared careful not to interrupt Greg or otherwise comment on advice to me or Greg’s business dealings generally”. [11]

11. Exhibit D, Affidavit, Sharon McDonagh dated 23 June 2016 at pars 43-45

50. The Further Amended Statement of Claim alleged that Greg and Vanessa Huxley introduced her to Rory McDonnell, representing that he was a financial advisor who could be trusted and relied upon. Ms McDonagh’s affidavit however stated that it was only Greg Huxley who introduced her to Rory McDonnell and it was only Greg who made any representation to her about Rory McDonnell:

“[47] I recall that I first met Rory McDonnell in late 2013. I cannot recall the exact date that this occurred. There were three reasons I met Rory McDonnell. The first reason was Greg Huxley said words to me to the effect of “I have this mate and he’s really good with this type of thing. He will be the financial advisor for you”. The second reason was Greg arranged the meeting and took me to the meeting. The third reason was that I needed financial assistance and I did not have another financial advisor or anybody else helping me.

[48] I first heard about Rory McDonnell when Greg Huxley told me that he had a friend who could assist with investing the settlement money”. [12]

12. Exhibit D, Affidavit, Sharon McDonagh dated 23 June 2016 at pars 47-48

51. Ms McDonagh alleged that Greg and Vanessa Huxley and Rory McDonnell advised her to “trust them” and “allow them” to assist her in setting up a superannuation fund to be established for her benefit and in organising a loan to produce income for her. This is what is asserted about this in her affidavit:

“[49] I recall that my meetings with Rory McDonnell generally took place at a local coffee shop in Concord (the Coffee Shop).

[50] I can recall one particular meeting with Rory McDonnell at the Coffee Shop when Greg Huxley was there to introduce Rory McDonnell to me. When I first met Rory McDonnell Greg introduced Rory to me as “the financial advisor that I was telling about”. Mr McDonnell did not correct Greg or indicate in anyway that he was not a financial advisor. I believe this was the first meeting. I cannot recall the date that this meeting took place. I can recall that after introducing me to Rory McDonnell, Greg Huxley then left the meeting.

[51] When Rory McDonnell was introduced to me, I believed that he was a financial advisor and that his purpose in meeting me was to advise me on investments that were in my best interests.

[52] I can recall that Rory McDonnell and I had a few meetings at the local Coffee Shop. I can recall one occasion where Rory McDonnell came to my apartment to discuss the investments and to have me sign a number of documents.

[53] From my point of view it appeared to me at the time that Rory McDonnell acted as the arranger for the transactions. I say this not because I was aware of precisely what was happening but because Rory McDonnell was the person that I was immediately dealing with”. [13]

13. Exhibit D, Affidavit, Sharon McDonagh dated 23 June 2016 at pars 49-53

52. In this context Ms McDonagh said the following occurred:

“[54] I recall being presented with a number of promotional booklets for different property estates by Rory McDonnell. A copy of those promotional booklets is at pages 1-19.

[55] The investment was explained to me by Rory McDonnell that I would be investing money in the development of these property estates by loaning money to two development companies, Beechworth Land Estates Pty Ltd and Griffith Estates Pty Ltd, and that I would be getting a high interest return. It was explained to me by Rory that I would receive monthly interest payments of $6,000 from the loans together. I cannot recall the exact words I was told but I can recall that they were to the effect of “as Greg explained to you will receive more money in interest payments from these loans than if you put the money in the bank. The investment will give you $6,000 per month and it will be set up in such a way that you will minimise your tax”. Copies of Mortgage Summary documents for both of the loans that show the interest payments I was supposed to receive are at pages 20 and 21. I understand that both documents list Beechworth Land Estates Pty Ltd as the “Borrower”, however, I believe the document listing the loan of $400,000 should be stated as Griffith Estates Pty Ltd as the borrower.

[56] I can recall the investment being explained to me as being two separate loans. One loan totalling $200,000.00 to Beechworth Land Estates Pty Ltd and another loan of $400,000.00 to Griffith Estates Pty Ltd.

[57] As security for the loan to Beechworth Land Estates Pty Ltd, it was explained to me that I would have a registered Caveat on the mortgage held by Beechworth Land Estates Pty Ltd over a parcel of land in the development. I was told by Rory, words to the effect that “Greg will arrange a lawyer to do all the legal work on your behalf so that the money is safely secured”.

[58] As security for the loan to Griffith Estates Pty Ltd, it was explained to me in words to the following effect, “You will be given a mortgage over property being developed by Griffith Estates Pty Ltd so that you are fully secured and your money will be guaranteed”. [14]

14. Exhibit D, Affidavit, Sharon McDonagh dated 23 June 2016 at pars 54-58

53. In respect of McDonagh Management, Ms McDonagh said this:

“[59] In late 2013, I was unaware or I do not recall that a superannuation fund was set up in my name. I say “I was unaware or I do not recall” because as explained above I accept that I have memory problems. Notwithstanding the shortcomings of my memory I am certain that I did not initiate or play any active role in the establishment or administration of the superannuation fund.

[60] I have been shown a document titled “The McDonagh Family Superannuation Fund SMS Trust Deed”. I have been shown the “Execution” page of that document dated 12 November 2013. I have been shown my signature on that document next to a “sign here” tab. I have also been shown Rory McDonnell’s name and signature as my witness. I confirm that I have no recollection of signing this document. A copy of the The McDonagh Family Superannuation Fund SMSF Trust Deed document is at pages 22-98.

[61] I was also unaware that in late 2013, a management company was set up in my name and that I am a named Director and Secretary of this company. Given my disabilities and restricted intellectual abilities as detailed above I doubt that I would have had the capacity to manage a company or fulfil the roles of either director or secretary. I would not have felt comfortable knowingly agreeing to any of these roles.

[62] I have been shown a document titled “Application for Registration as an Australian Company” lodged on 12 November 2013. I was unaware or I do not recall ever being told that this document was being lodged with the Australian Securities and Investment Commission. A copy of that application form is at pages 99-102.

[63] I have been shown a document titled “McDonagh Management Pty Ltd A.C.N. 166 719 839 Company Constitution”. I have been shown the “Execution” page of that document dated 13 November 2013. I have been shown my signature on that document next to a “sign here” tab. I have been shown Rory McDonnell’s name and signature as witness. I confirm that I have no recollection of signing this document. A copy of the McDonagh Management Pty Ltd A.C.N. 166 719 839 Company Constitution document is at pages 103-141.

[64] I am unaware of what the current status of McDonagh Management Pty Ltd A.C.N. 166 719 839 is”. [15]

15. Exhibit D, Affidavit, Sharon McDonagh dated 23 June 2016 at pars 59-64

54. Ms McDonagh alleges that she “had been made aware by her solicitors” (presumably because she has no recollection of this at all) that on 27, 28 and/or 29 November 2013, she was provided with a number of documents to sign:

“[66] I have been made aware by my solicitors that on 27, 28 and 29 November 2013, I signed a number of documents in relation to the two loan agreements to Griffith Estates Pty Limited and Beechworth Land Estates Pty Limited.

[67] I cannot recall specifically signing these documents, however, I do recall a meeting with Rory McDonnell at the local café where he presented me with a number of documents that he wanted me to sign.

[68] I recall being told words to the effect of “sign here” over and over again by Rory McDonnell. I do not recall being provided with these documents on any previous occasion and I do not have any recollection of reading these documents myself”. [16]

16. Exhibit D, Affidavit, Sharon McDonagh dated 23 June 2016 at pars 66-68

55. In the Further Amended Statement of Claim it is alleged that Gregory and Vanessa Huxley and/or Rory McDonnell provided a folder of documents that had been prepared by Gus Dib and/or Dib Lawyers titled “McDonagh Management Loan and Banking Portfolio” regarding Griffith. It is alleged that this folder comprised various documents including:

1. a Deed of Loan between McDonagh Management as trustee for the McDonagh Superannuation Fund and Griffith Estates;

2. a Security Agreement between Griffith Estates and the superannuation fund;

3. a Drawdown Notice in the sum of $400,000;

4. a purported Statement of Position of Spencer;

5. a Deed of Guarantee between Spencer and the superannuation fund;

6. an Acknowledgement of Legal Advice signed by James Spencer as proposed borrower and guarantor;

7. a Business Purpose Declaration;

8. a Statutory Declaration completed by Spencer and promotional material regarding housing estates in Griffith NSW;

9. a purported mortgage over Griffith Estates’ interest in Registered Mortgages number AE324437 and AE32354 (“the Griffith Estates material”).

   56. In the Further Amended Statement of Claim it is alleged that “at about the same time, Greg and Vanessa Huxley and/or Rory McDonnell” provided another folder to Ms McDonagh, also prepared by Gus Dib and/or Dib Lawyers titled “Sharon McDonagh Loan and Banking Portfolio”. This entailed a similar selection of documents except they were regarding Beechworth:

10. a Deed of Loan between Ms McDonagh and Beechworth Estates;

11. a General Security Agreement;

12. a Declaration of Independent Advice and a Deed of Guarantee executed by Spencer;

13. a Caveat pursuant to s 89 of the Transfer of Lands Act 1958 (Vic);

a Transfer of Land by Mortgagee pursuant to s 77 of the Transfer of Lands Act;

1. an Acknowledgment of Legal Advice signed by Spencer as guarantor;

2. a Declaration of Business Purpose by Spencer;

3. a Statutory Declaration of solvency of Beechworth Estates by Spencer;

4. a purported Drawdown Notice in the sum of $200,000;

some brochures and a price list describing a housing estate at Elementary Rise, a 25 minute drive from Albury-Wodonga;

1. a rental appraisal document dated 17 December 2012 regarding a particular lot at 54 Hays Drive, Beechworth.

   57. Ms McDonagh’s affidavit deposed to being shown various documents by her solicitor at the time of preparing and swearing her affidavit in 2016 and that she had no recollection of reading or signing the documents. She claims however to recall seeing the “Mortgage of Lease, Mortgage or Charge” document because she had seen a document of that type during her time as a real estate agent and understood it to be an “official” government type document and she “believed it and the other documents were prepared to secure my money by the solicitor arranged for me by Greg”. [17]

       17. Exhibit D, Affidavit, Sharon McDonagh dated 23 June 2016 at par 72

   58. Ms McDonagh made similar assertions regarding the Caveat dated 29 November 2013:

“[78] I have been shown a document titled “Caveat” dated 29 November 2013. I have been shown my signature on this document. I do not recall signing this document, however, I do recall having seen this document in or about late 2013. I understand this document to represent the caveat that I had been told I would have over the mortgage to Beechworth Land Estates Pty Ltd in a parcel of land. I remember seeing this document as I had seen these types of documents during my time as a real estate agent prior to the accident on 3 June 2011. I remember feeling safe when I saw this document as I understand it as being an “official” government type document. A copy of the Caveat document dated 29 November 2013 is at page 308”. [18]

18. Exhibit D, Affidavit, Sharon McDonagh dated 23 June 2016 at par 78

59. Ms McDonagh made this rather extraordinary declaration at par 80 of her affidavit:

“[80] I confirm that even if I did read these documents I would not have understood them and I do not have the ability to remember doing this”. [19]

19. Exhibit D, Affidavit, Sharon McDonagh dated 23 June 2016 at par 80

60. In the Further Amended Statement of Claim it is asserted that the two “Portfolios” contained Dib Lawyers’ office references “GAD:APH:202081” and “GAD:APH:202644” respectively, and that these references were to Gus Dib, the principal of the firm, and Adam, a paralegal at Dib Lawyers and the son of Gregory Huxley.

61. In her affidavit, Ms McDonagh says this about Dib Lawyers:

“[82] In relation to Dib Lawyers, I can recall Rory McDonnell saying to me a number of times words to the effect of “Dib Lawyers are great, we always use them”.

[83] I can recall that some documents were provided to me with the Dib Lawyers insignia on them. On seeing this I believed that Dib Lawyers had prepared those documents for me. This belief was confirmed, at least in my mind, in a number of ways including:

1. My experience in real estate has led me to believe that there were always two lawyers involved in a real estate transaction except where the parties had agreed that a single lawyer could represent both sides or in rare cases where somebody with legal knowledge acted as their own lawyer.

2. I certainly did not and would not have acted as my own lawyer.

3. Rory McDonnell did not represent himself as having any legal qualifications.

4. Rory McDonnell had said to me a number times words to the effect of “Dib Lawyers are great, we always use them”. He also said “Greg will arrange a lawyer to do all the legal work on your behalf so that the money is safely secured”. Greg had said to me a number of times “I have used Rory McDonnell for a number of business deals he has always come through for me”. These statements together with the whole of the circumstance led me to believe that Dib Lawyers were my solicitors.

5. I knew from many conversations with Greg and Vanessa that Adam Huxley was a lawyer and Greg and Vanessa were close to their son Adam.

6. I had understood that Greg had arranged my lawyer. It made sense to me that Dib Lawyers would be acting for me. I had no reason to think otherwise.

7. The transactions appeared to me to be far too complex to not need a lawyer.

8. The transactions involved a large number of legal documents that I considered only a lawyer would understand them.

9. From the little I did know about the transactions, I knew that they involved a mortgage or mortgages. From my experience in real estate I believed that mortgages were registered by a lawyer. Although I didn’t know the process, I believed that the registration of mortgages was done by the lender’s lawyers by using certain legal documents that they obtained at the time of settlement. I assumed that these documents went to my lawyers. When I was subsequently informed by my current solicitor that the relevant document needed for registration remained with Dib Lawyers, that was consistent with my belief that Dib Lawyers were my solicitors for the transactions.

10. When payments were not received and I approached Greg and told him of my concern and lack of payments, Greg said to me words to the effect “don’t worry the solicitors that I arranged for you are very good. I’m sure that they crossed every “T” and dotted every “I” to make sure your money is perfectly safe. The same lawyers look after mine and Vanesa’s legal work.”

11. I have been informed by my current solicitors, that Dib Lawyers retained the Certificates of Title and were therefore the only lawyers who could have registered the mortgages and security. I was surprised to be told that Dib Lawyers have denied in these proceedings that they were my solicitors.

[84] I recall thinking that it was good having a lawyer look over and prepare the paperwork. This helped develop my trust in the situation.

[85] I do not recall being told to seek independent legal advice by anyone at any time. There is no way that I would have tried to be my own lawyer or refuse the assistance of a lawyer. I confirm that I did not think anything of not being told to get legal advice about the documents because I thought that Dib Lawyers had looked over the paperwork for me.

[86] At the time, I was unaware that Adam Huxley was employed by Dib Lawyers but as I understood that Dib Lawyers were appointed to act for me it would not have surprised me at the time.

[87] Equally, I was unaware that Adam Huxley had drafted the documents that Rory McDonnell asked me to sign but again as I understood that Dib Lawyers were appointed to act for me it would not have surprised me at the time. The only qualification on this is, that as I had regular contact with Greg and Vanessa at this time, and, given that I thought they were my friends at the time, I would have expected it to have come up in conversation with Greg or Vanessa. I am now surprised that Adam’s involvement in the drafting of the documents was not disclosed to me.

[88] I can recall thinking that it was completely safe to sign the documents that Rory McDonnell gave me as I thought that Rory McDonnell was my financial advisor and that Dib Lawyers had prepared and looked over the documents for me as my solicitors.

[89] I am informed that Dib Lawyers and Adam Huxley now deny that they acted for me. As said it comes as a surprise to me that Dib Lawyers deny that they were acting for me. As stated, as I understand matters, when a loan for mortgage is given, the borrower needs to give the lenders solicitor’s title documents so that registration of the mortgage can take place. I have been informed by my current solicitors that in about January 2016, Dib Lawyers retained the title documents and they were not passed on to any other lawyers to register any security interests. Dib Lawyers retaining the title deeds and certificates of title is consistent with my understanding as well as what I had been told by Greg and Rory McDonnell that the solicitors were acting for me to protect me”. [20]

20. Exhibit D, Affidavit, Sharon McDonagh dated 23 June 2016 at pars 82-89

62. I interpolate here that there is no evidence at all that Gus Dib had any knowledge of these documents, these files or the papers that were prepared by Adam and provided to Greg Huxley in response to Greg Huxley’s email request on 27 November 2013. Nor is there any evidence that Vanessa Huxley was involved at all in any of these steps.

63. It is alleged in the Further Amended Statement of Claim that Ms McDonagh was “advised by Rory McDonnell and Gregory and Vanessa Huxley to execute the various documents”, but there is no evidence of any involvement of Vanessa Huxley in these steps. This allegation seems to be a reconstruction, not a recollection and is not consistent with the narrative in Ms McDonagh’s affidavit.

64. At the time of preparing her affidavit in 2016, Ms McDonagh says that she was unaware of all the documents she had been requested to sign in 2013 and says that she was never provided with a complete set of the executed documents.

65. It is common ground that the funds were withdrawn from Ms McDonagh’s bank accounts on 29 November 2013.

66. Ms McDonagh alleged that she does not personally know whether the funds were dispersed in accordance with the Drawdown Notices she had been given or not.

67. From such documents as were made available on discovery, she (and McDonagh Management) allege that the following sums were disbursed:

1. $177,390 to Vangory Holdings

2. $5,000 to Rory McDonnell

3. $127,036 to Benitch

4. $290,574 to Beechworth Estates and Griffith Estates, and

5. Disbursements to Rory McDonnell in excess of $6,000 per month.

   68. It is alleged in the Further Amended Statement of Claim that the funds disbursed in this way caused advantage to flow to each of the defendants:

6. Vanessa Huxley: owned all the shares in Vangory Holdings at the relevant time and Vangory Holdings were owed money by Griffith Estates Pty Ltd.

7. Rory McDonnell: was a director and held a financial interest in York Street Capital which was owed money by both Beechworth Estates and Griffith Estates and he was a director of Griffith Estates Pty Ltd.

8. Ghassan Dib: was owed money by both Beechworth Estates and Griffith Estates and his firm, Dib Lawyers, was owed money by both Beechworth Estates and Griffith Estates.

9. Spencer: was a shareholder of Beechworth Estates; he was owed money by Beechworth Estates; he was a guarantor of Beechworth Estates; he was a significant shareholder of Griffith Estates; he was owed money by Griffith Estates and was a guarantor of Griffith Estates.

10. Benitch and Dawson: Dawson was a director of Vangory Holdings and Benitch Investments; both Vangory Holdings and Benitch Investments were owed money by Beechworth Estates and/or Griffith Estates; Vangory Holdings and Benitch Investments received a total of $304,426 of Ms McDonagh’s money.

11. Gregory Huxley: this was not clearly pleaded but it seems to be asserted that Gregory Huxley had some potential to obtain a benefit from Vangory Holdings, but the basis of this assertion was not specifically pleaded.

    69. It was pleaded in par 35 (y) of the Further Amended Statement of Claim that “further particulars will be provided when the defendants cease withholding the plaintiffs’ documents and/or after discovery”, but no further particulars were ever provided. There was no pleading at all identifying the alleged advantage said to flow to Adam.

    70. Under the heading “Requests for loan repayments” Ms McDonagh states her understanding of what occurred:

“[90] Following being asked to sign all of the documentation in late November 2013, I recall that I started to become worried that something was wrong as none of the investment returns had been provided to me as promised. First Greg then Rory McDonnell had told me that I would “receive monthly returns on the loans”.

[91] I recall trying to contact Greg Huxley and Rory McDonnell and being unable to make contact with them. I recall feeling that my calls were being ignored.

[92] I confirm that I never received any Certificate of Title or any registered Caveat documents or any notice of registration of any security documentation. I have been informed by my current solicitor that neither Dib Lawyers nor any other person registered any security.

[93] I recall on one occasion when I met with Rory McDonnell following November 2013 to ask him questions about the loan return that I was expecting and on this occasion Rory McDonnell gave me $50.00 out of his own wallet and he said words to the effect that the money would, “tide me over”.

[94] I have been shown a document by my solicitors titled “Repayment Notice” dated 19 March 2014 addressed to Beechworth Land Estates Pty Ltd. I can see that this document is for a drawdown of $20,000.00 against the loan principle (sic) that I lent to Beechworth Land Estates. I have been shown my signature on this document. I cannot recall preparing this document. I cannot recall ever receiving $20,000.00 from Beechworth Land Estates after 19 March 2014. A copy of the Repayment Notice dated 19 March 2014 is at page 312.

[95] I recall that during this time, I was not paid any interest payments or loan repayments”. [21]

21. Exhibit D, Affidavit, Sharon McDonagh dated 23 June 2016 at pars 90-95

71. Ms McDonagh then states:

“[96] I have been shown a document by my solicitors purporting to be a letter from me to Rory McDonnell dated 2 May 2014. The letter requests a lump sum repayment of $30,000.00 from the loan to Griffith Estates Pty Limited, $1,500 per week in repayments until the loan is repaid and the ability to request up to $10,000.00 for emergency funds within 7 days. I do not believe that I prepared this document as I can recall Rory brining it to my apartment. I believe Rory prepared this document and brought it to my apartment. I recognise the signature above the word “witness” to be that of my daughter, Jennifer. I do not recall receiving any lump sum repayments or interest payments after 2 May 2014. A copy of the letter addressed to Rory McDonnell dated 2 May 2014 is at page 313.

[97] I have been shown a letter addressed to me from Greg Huxley dated 19 June 2014. I can recall receiving this letter and the general content of the letter, however, I cannot recall the specific details contained in the letter. To the best of my knowledge, I had still not received any money from either my loan to Griffith Estates or Beechworth Land Estates. A copy of the letter from Greg Huxley dated 19 June 2014 is at pages 314-316.

[98] As a result of not receiving any interest payments or loan repayments from either of the loans to Beechworth Land Estates or Griffiths Estates, I was unable to pay my rent for the apartment that I lived in at Breakfast Point, NSW. As a result, my landlord brought a claim against me in the NSW Civil and Administrative Tribunal Consumer and Commercial Division, for the payment of rental arrears. A copy of the application form lodged with the NSW Civil and Administrative Tribunal on 25 June 2014 is at page 317.

[99] I recall that after not receiving any moneys from either Griffith Estates or Beechworth Land Estates I went back to my personal injury solicitors (my current solicitors) for assistance.

[100] I understand and verily believe that my solicitors, under cover of a letter dated 24 August 2014, sent a letter of demand to Griffith Estates Pty Ltd for payment of the principle (sic) loan of $400,000.00, plus interest and legal fees. A copy of that letter of demand is at page 318.

[101] I understand and verily believe that my solicitors, under cover of a letter dated 24 August 2014, sent a letter of demand to Beechworth Estates Pty Ltd for payment of the principle (sic) loan of $200,000.00, plus interest and legal fees. A copy of that letter of demand is at page 319”. [22]

22. Exhibit D, Affidavit, Sharon McDonagh dated 23 June 2016 at pars 96-101

72. Ms McDonagh states that she was told both companies were under administration [23] and that on at least one occasion a “proxy” she had never heard of attended a creditors meeting under a proxy form signed by Rory McDonnell.

    23. Exhibit D, Affidavit, Sharon McDonagh dated 23 June 2016 at pars 104-115

73. The Further Amended Statement of Claim goes on to delineate what it collectively describes as “The Defendants’ conduct”.

74. The first part, pars 36 to 69 inclusive, make factual assertions and conclusions regarding actions the plaintiffs assert were taken by various defendants.

75. The second part, pars 70 to 103, sets out the 22 separate “Counts” said to apply to the conduct of the defendants. Some counts apply to one or some of the defendants so it will be necessary to refer to each separately.

76. In respect of the Griffith loan, Ms McDonagh and her company allege that on the funds disbursement date, Rory McDonnell was director of Griffith but the next day Mr Spencer was swapped in as director. At all times Griffith was insolvent and this insolvency was known to all of the defendants. The Statement of Position of Mr Spencer provided to the plaintiffs was materially false, misleading and deceptive regarding Mr Spencer’s true financial position which included false account about property he owned in value, his earnings, his occupation and his net wealth. [24]

    24. Further Amended Statement of Claim at par 44 (a) to (o)

77. Ms McDonagh and her company allege that the documents contained in the McDonagh Management Loan and Banking portfolio were provided by Rory McDonnell, Greg, Vanessa and Adam, Gus Dib, Dib Lawyers, Griffith and Mr Spencer and were materially false, misleading and deceptive and were intended to, and in fact, misled Ms McDonagh and her company.

78. These falsities are listed in pars 45 (a) to (o) of the Further Amended Statement of Claim and include that Mr Spencer was a director of Griffith at the funds disbursement date (when in fact Rory McDonnell was), that Rory McDonnell was providing independent advice, that Rory McDonnell would manage the transactions for the plaintiffs’ benefit and hold all the necessary documents for the plaintiffs, that Greg and Vanessa Huxley were providing independent advice in the interests of the first plaintiff, that Griffith was solvent, that Mr Spencer was a creditworthy guarantor, that Mr Spencer’s statement of position was true. Other falsities alleged were that McDonagh Management would hold security by a registered charge over all of Griffith’s interest in the loan security documents, that McDonagh Management would be secured by registered charges over specific registered mortgages and by charges over all security documents collateral to those registered mortgages, that the effect of this would be that the company would be secured by registered charges over the land set out in the specified folio identifiers corresponding to land situated at particular nominated addresses in Griffith. Further, that there would be stamped mortgages available and, that McDonagh Management would be “secured by the “certificate of title for registration of the registered charge” over all that land situated at the addresses listed, as set out in Clause 1 of the Deed of Loan.

79. McDonagh Management asserts that no such security was in fact provided.

80. In respect of the Beechworth Loan, it is alleged that the documents provided by Rory McDonnell, Greg, Vanessa and Adam, Gus Dib, Dib Lawyers, Griffith Estates and Mr Spencer were materially false and misleading and deceptive and did in fact mislead Ms McDonagh.

81. The falsities are listed in pars 46 (a) to (n) of the Further Amended Statement of Claim. Some of those are identical to the falsities alleged regarding Griffith, namely that Rory McDonnell was providing independent advice, that he would manage the transaction “to the plaintiffs’ benefit” and “hold all necessary documents for the benefit of the plaintiffs”, that Mr and Mrs Huxley were providing independent advice in the interests of Ms McDonagh, that Beechworth was solvent, that Mr Spencer was a credit worthy guarantor and that his Statement of Financial Position was true.

82. Other falsities pleaded are that Mr Spencer was said to have replaced Rory McDonnell as director of Beechworth on 18 November 2018 when the fact was that he replaced him on 22 November 2013, six days before the funds were taken from Ms McDonagh’s account. Further, that Ms McDonagh would “have security by a charge over all or any of Beechworth’s title and interest in the first registered mortgage over a particular nominated registered dealing and over part of the land known as Red Hill Estate” located at Beechworth, Victoria at the address (and folio Identifier) specified. It was alleged that this would be secured by a caveat over that property and that this interest would be secured by “original signed documents granting an interest over any security”, and that this would be further secured by a certificate of title to allow for registration of the mortgage over the described land. The effect was described as security that would “allow for the first plaintiff as mortgagee to exercise any purported right over the purported security” and was defined in this way in Clause 1 of the Deed of Loan.

83. Ms McDonagh asserts that no such security was provided to her.

84. It was alleged in pars 47 and 50 of the Further Amended Statement of Claim that before it was legitimate to take any sums from Ms McDonagh or McDonagh Management, the respective Deeds of Loan required certain conditions precedent to be met, but in the case of both loans, those conditions precedent were not met. These included setting up a compliant registered superannuation fund, proper execution of the Deed(s) of Loan by a director of Beechworth and Griffith, delivery of relevant corporate documents and Drawdown Notices signed by an authorised signatory of Griffith (and Beechworth) specifying the purpose of the advance.

85. It was alleged that Beechworth had “no title, or no title of value to grant in any security, because it had on 10 October 2013 granted such security to a third person by way of loan agreement and General Security Deed”. At the time Beechworth did that, Rory McDonnell and Mr Spencer were directors of Beechworth.

86. In respect of Griffith, it is alleged that it was not disclosed to, or known by Ms McDonagh (and her company), that at the time the money was taken from her, Griffith was the subject of a winding up application, had entered into a Loan Agreement and General Security Deed with a third party, did not provide any valuable security to her company and only purported to give security over two mortgages to which it was not a party and had no interest to grant: (par 60 of the Further Amended Statement of Claim).

87. It was asserted that neither Ms McDonagh nor McDonagh Management received any payments in accordance with the documents. Demands for payment were made on 22 August 2014 to Griffith, to Beechworth and to Mr Spencer as guarantor, but no funds were paid.

88. It was alleged that at the time of the taking of the funds, all defendants knew that the loan documents issued to Ms McDonagh and her company were materially false and all of the defendants were “knowingly concerned in misleading the plaintiffs”: (pars 67 to 69 of the Further Amended Statement of Claim).

89. It was further alleged, as well as pleaded in the alternative, that the failure to provide Ms McDonagh and her company with the whole of the necessary documentation meant that “in law no transaction was agreed to or entered into by either plaintiff”: (pars 58 and 59 of the Further Amended Statement of Claim).

(c) The “Counts” or causes of action relied on by the Plaintiffs

90. The first and second Counts claim the “purported loans” to Griffith and Beechworth (in the sums of $400,000 and $200,000 respectively) were in effect, conversions by Rory McDonnell.

91. The third Count was said to be a breach of guarantee by Mr Spencer.

92. The fourth Count was said to be “unconscionable conduct” on the basis that Ms McDonagh was under a special disadvantage and that all of the defendants took advantage of her special disadvantage and exploited her disadvantage.

93. The fifth Count was that the unconscionability on the part of each of the defendants occurred during “engaging in trade or commerce” as defined in the Competition and Consumer Act 2010 (Cth), Sch 2 – Australian Consumer Law, s 20 (Australian Consumer Law), and caused loss and damage.

94. The sixth Count asserts that each of the defendants contravened s 236 of the Australian Consumer Law causing loss and damage.

95. The seventh Count asserts that each of the defendants have engaged in conduct that requires they compensate the plaintiffs for the “whole of the loss”, or to “reduce the loss or damage” and that each of them were involved in the “contraventions” of the Australian Consumer Law by Griffith and/or Beechworth, in that they each “aided or abetted or procured the contraventions” because they were “directly or indirectly knowingly concerned in the contraventions”. The particulars of loss and damage are described as “$600,000 plus interest and legal costs as a damage”.

96. The eighth Count asserts a breach of s 12CA of the ASIC Act because the defendants “in trade and commerce” engaged in conduct in relation to financial services where such conduct was “unconscionable within the meaning of the unwritten law of Australia”. It is also asserted as “particulars” that Ms McDonagh was under special disadvantage and the defendants took advantage of and exploited that “against good conscience”.

97. The ninth Count is alleged to be pursuant to s 12CB of the ASIC Act that the conduct of the defendants was “in trade and commerce” and “in connection with the supply or possible supply of financial circumstances (sic)” to the plaintiffs that was unconscionable. The “special disadvantage” particulars are repeated.

98. The tenth Count is expressed to be pressed against all defendants under s 21 of the Competition and Consumer Act and repeats similar allegations as those under s 12CB of the ASIC Act. (This should no doubt be a reference to s 21 of the Australian Consumer Law and is in reference to the “supply of goods and services”). I interpolate here to observe that what “goods and services” are claimed to have been supplied by each active defendant and when has not been particularised and so this allegation is fatally flawed.

99. The eleventh Count is made under s 1041H of the Corporations Act and asserts that the defendants “engaged in conduct in relation to a financial product or a financial service that was misleading or likely to mislead or deceive”.

100. The twelfth Count comprises an assertion that the defendants arranged for Rory McDonnell, Griffith, Beechworth and Mr Spencer “to deal in financial products” contrary to s 766C of the Corporations Act, but seems to be claiming injunctive relief under s 1324 of the Corporations Act. Mr Goodridge disavowed any injunctive relief was being sought and was to clarify the position with this Count. He did not do so, [25] but in failing to return to it or deal with it in written submissions, I take this allegation to not be pressed.

     25. Tcpt, 6 April 2018, p 471(4-35)

101. The thirteenth Court alleges that the defendants each “aided and abetted, counselled or procured” the contravention of the Corporations Act.

102. The fourteenth Count alleges that because of the “conversations and advice by Rory McDonnell” and advice by him set out in an email of 30 June 2013, Greg Huxley, Vanessa Huxley and Rory McDonnell were each in breach of s 911A of the Corporations Act for “carrying on a financial services business” without an Australian Financial Services Licence.

103. The fifteenth Count alleges that Greg Huxley, Vanessa Huxley, Rory McDonnell, Adam, Gus Dib, Dib Lawyers, Mr Spencer, Griffith and Beechworth “made statements and disseminated information” that was “false and materially misleading”, to “induce the plaintiffs to apply for, or acquire, a financial product or products” in breach of s 1041E of the Corporations Act.

104. The sixteenth Count is headed “s 1041F Corporations Act” and asserts that Greg Huxley, Vanessa Huxley, Rory McDonnell, Adam, Gus Dib, Dib Lawyers, Mr Spencer, Griffith and Beechworth “induced the plaintiffs to purchase or deal in a financial product by making misleading, false and deceptive statements and or the dishonest concealment of facts”.

105. The seventeenth Count is headed “s 1041G Corporations Act” and asserts that Gregory Huxley, Vanessa Huxley, Rory McDonnell, Adam Huxley, Gus Dib, Dib Lawyers, Mr Spencer, Griffith and Beechworth “engaged in dishonest conduct in relation to a financial product or service”.

106. The eighteenth Count is headed “s 1041I Corporations Act” and asserts that the plaintiffs “suffered damage by conduct of the defendants in respect of conduct in contravention of ss 911A, 777C, 1324, 1041E, 1041F, 1041G and 1041H” of the Act and that “each and every other defendant was a person involved in that contravention” and that the contravention(s) caused the plaintiffs loss. It seems from what Mr Goodridge submitted at the close of the evidence on 6 April 2018, Counts 15 - 18 should be read together as statutory breaches that ground the damages sought under s 1041I. [26]

     26. Tcpt, 6 April 2018, p 471(26-31)

107. The nineteenth Count is headed “Negligent Misstatement” and asserts that Gregory Huxley, Vanessa Huxley, Mr Spencer, Rory McDonnell, Gus Dib and/or Dib Lawyers made misrepresentations to the plaintiffs “without having a reasonable ground for making their representations”. The representations are particularised:

1. Particulars of Misrepresentation

a)   Mr Spencer was a director of Griffith Estate as at the funds disbursement date.

b)   Beechworth was financially secure and creditworthy.

c)   Griffith Estate was financially secure and creditworthy.

d)   Mr Rory McDonnell was not a related party to Beechworth when in fact he had been a director until his replacement by Mr Spencer on 18 November 2013.

e)   Mr Rory McDonnell was not a related person to Beechworth when in fact he had been secretary of Beechworth until replaced by Mr Spencer on 22 November 2013.

f)   That Beechworth was not a related entity to Mr Huxley and/or Mrs Huxley and/or Adam Huxley when in fact both its principal place of business and registered address was c/- Adam Huxley at DIB Lawyers, Stromboli House, Suite 4, Level 1, 434 Chapel Road, Bankstown NSW 2200 and that such address had been the principal place of business for Beechworth since at least 17 October 2012.

g)   Neither Mr Huxley nor Mrs Huxley nor Rory McDonnell were a related entity to Vangory Holdings Pty Limited when in fact, Mrs Huxley owned both the legal and beneficial title to all 4 shares in the company.

h)   Mrs Huxley, Mr Huxley and Rory McDonnell were not a related or interested person in Vangory Holdings Pty Limited when in truth and in fact, Vangory Holdings Pty Limited operated as a mechanism to fund monies from the Plaintiffs to the First, Second and Third defendants.

1. That Vangory Holdings Pty Limited was not a related entity to Mrs Huxley, Mr Huxley or Rory McDonnell when in truth the name “Vangory” is a combination of their first names being Vanessa, Gregory and Rory.

j)   Mr Spencer was a creditworthy guarantor who had gross assets in his name to the value of $3,790.000.00 and had net asset position of $1,855,000 as at the funds disbursement date.

k)   Mr Spencer was the CEO of Property Strore (sic) earning a taxable gross annual income of $185,000.00 per annum.

l)   The loan agreement between the Second Plaintiff and Griffith Estate had been executed by a current director.

m)   That the loan agreement between the Second Plaintiff and Griffith Estate had been executed by a current secretary.

n)   That the general security agreement between the Second Plaintiff and Griffith Estate had been executed by a current director and secretary.

o)   That the general security agreement between the Second Plaintiff and Griffith Estate provided the Plaintiffs with valuable security.

p)   That the general security agreement between the Second Plaintiff and Griffith Estate would be registered.

q)   That the statutory declaration by Mr Spencer declared 28 November 2013 was truthful.

r)   That Mr Spencer truthfully declared that Griffith Estates was not insolvent and was able to pay its debts as and when they fell due when in fact the company was not solvent and had not been able to pay its debts when they fell due.

s)   That Griffith Estate owned 13 properties in Griffith with each property having an unencumbered value of between $309,500.00 and $315,000.00.

t) That the Plaintiffs received a valuable mortgage from Griffith Estate when in fact and in truth, the Plaintiffs received only a photocopy of a single page which falsely purported to be executed under Section 127 of the Corporation Act, 2001 and did not enclose Annexure A and did not include the original mortgage required for registration and which was not dated.

u)   Griffith Estate [sic] owned unencumbered 34 blocks of land and such blocks of land were unencumbered, located in Elm Tree Rise and had a net value of between $125,000.00 and $140,000.00 each.

1. That there was a company called Property Store Pty Limited or Property Store Limited.

w)   That Mr Spencer was the Chief Executive Officer of a corporation called “Property Store”.

1. That the copy of the caveat in the second suite of documents was the copy of an original which would be lodged on behalf of the First Plaintiff and provide security to the First Plaintiff for the personal injury damages.

y)   That the copy of the transfer of land provided by Beechworth was valuable security which the first named Plaintiff could use to ensure that there was no loss of personal injury damages.

z)   That the Certificate of Title in Volume 11449 Folio 464 would be provided to the First Plaintiff to empower the Plaintiff to exercise power of sale and/or foreclosure.

aa)   That Beechworth had provided a drawdown notice as prescribed in the Deed of Loan contained in the second suite of documents.

bb)   That Griffith Estates had provided the draw down notice as prescribed in the Deed of Loan in the first suite of documents.

cc)   That the defendants and each of them were acting in the best interests of the Plaintiffs.

dd)   That the First and Second Plaintiffs were fully secured against loss or default.

ee)   That Beechworth and Griffith Estates would pay monies to the Plaintiffs in accordance with the loan agreement when in fact no monies were ever paid to the Plaintiffs.

In oral argument on 6 April 2018, Mr Goodridge said that this allegation was pressed against Gus Dib, Adam and Greg Huxley. [27]

27. Tcpt, 6 April 2018, p 471

108. The twentieth Count is headed “Deceit” and is pressed against Greg Huxley, Vanessa Huxley, Rory McDonnell and Mr Spencer. [28] It states:

     28. Tcpt, 6 April 2018, p 471

1. Particulars of Deceit

a)   Mr Spencer was a director of Griffith Estates as at the funds disbursement date.

b)   Beechworth was financially secure and creditworthy.

c)   Griffith Estates was financially secure and creditworthy.

d)   Beechworth, Griffith Estate and Mr Spencer were individually and collectively providing the plaintiffs with valuable security sufficient to fully secure the indebtedness of Griffith Estate and Beechworth to the plaintiffs.

e)   Rory McDonnell and Mr Huxley were looking out for the interests of the Plaintiffs and would arrange all documentation and registration of all interests of the First Plaintiff in establishing a Self Managed Superannuation Fund and the safe investment of the personal injury damages and the collection, registration and management of all documentation and securities.

f)   Rory McDonnell was not a related party to Beechworth when in fact he had been a director until his replacement by Mr Spencer on 18 November 2013.

494. Count 6 relies upon s 236 of the Australian Consumer Law which provides:

Actions for damages

(1)  If:

(a)  a person (the claimant ) suffers loss or damage because of the conduct of another person; and

(b)  the conduct contravened a provision of Chapter 2 or 3

the claimant may recover the amount of the loss or damage by action against that other person, or against any person involved in   the contravention.

(2)  An action under subsection (1) may be commenced at any time within 6 years after the day on which the cause of action that relates to the conduct accrued.

495. Count 7 appears to be an aid and abet allegation levelled against all defendants that they knew and participated in the statutory contraventions of the others.

496. Counts 8 and 9 rely upon ss 12CA 12CB of the ASIC Act which provide:

12CA Unconscionable conduct within the meaning of the unwritten law of the States and Territories

(1)   A person must not, in trade or commerce, engage in conduct in relation to financial services if the conduct is unconscionable within the meaning of the unwritten law, from time to time, of the States and Territories.

(2) This section does not apply to conduct that is prohibited by section 12CB.

12CB Unconscionable conduct in connection with financial services

(1)   A person must not, in trade or commerce, in connection with:

(a)   the supply or possible supply of financial services to a person; or

(b)   the acquisition or possible acquisition of financial services from a person;

engage in conduct that is, in all the circumstances, unconscionable.

(2)   This section does not apply to conduct that is engaged in only because the person engaging in the conduct:

(a)   institutes legal proceedings in relation to the supply or possible supply, or in relation to the acquisition or possible acquisition; or

(b)   refers to arbitration a dispute or claim in relation to the supply or possible supply, or in relation to the acquisition or possible acquisition.

(3)   For the purpose of determining whether a person has contravened subsection (1):

(a)   the court must not have regard to any circumstances that were not reasonably foreseeable at the time of the alleged contravention; and

497. Count 10 relies upon s 21 of the Australian Consumer Law which provides:

Unconscionable conduct in connection with goods or services

(1) A person must not, in trade or commerce, in connection with:

(a) the supply or possible supply of goods or services to a person; or

(b) the acquisition or possible acquisition of goods or services from a person;

engage in conduct that is, in all the circumstances, unconscionable.

(2) This section does not apply to conduct that is engaged in only because the person engaging in the conduct:

(a) institutes legal proceedings in relation to the supply or possible supply, or in relation to the acquisition or possible acquisition; or

(b) refers to arbitration a dispute or claim in relation to the supply or possible supply, or in relation to the acquisition or possible acquisition.

(3) For the purpose of determining whether a person has contravened subsection (1):

(a) the court must not have regard to any circumstances that were not reasonably foreseeable at the time of the alleged contravention; and

(b) the court may have regard to conduct engaged in, or circumstances existing, before the commencement of this section.

(4) It is the intention of the Parliament that:

(a) this section is not limited by the unwritten law relating to unconscionable conduct; and

(b) this section is capable of applying to a system of conduct or pattern of behaviour, whether or not a particular individual is identified as having been disadvantaged by the conduct or behaviour; and

(c) in considering whether conduct to which a contract relates is unconscionable, a court’s consideration of the contract may include consideration of:

(i) the terms of the contract; and

(ii) the manner in which and the extent to which the contract is carried out;

and is not limited to consideration of the circumstances relating to formation of the contract.

498. It is self-evident that a number of these statutory unconscionability conduct claims are premised upon the defendants having engaged in conduct that was “in trade or commerce”. The pleadings do not even attempt to address that prerequisite.

499. Nor is it evident from the pleadings, or, for that matter, the evidence called what “financial services”, or “goods or services” the plaintiffs are asserting the active defendants were supplying that would correspond to the requirements of ss 12CA and 12CB of the ASIC Act and s 21 of the Australian Consumer Law.

500. Even taking into account the statutory principles that suggest perhaps a wider range of behaviours that it is alleged may, broadly considered, correspond to a finding of unconscionability, it is still essential that the conduct said to have been undertaken by each defendant is specifically identified rather than referred to by a scattergun list of unattributed acts.

501. For count 7 to succeed there needed to be clear identification and particularisation of the principal conduct that comprised the statutory contravention(s). This has not been done and there is no evidence that allows the task of ascertaining “accessorial” liability to be done. The bald assertion that “everybody knew”, is inadequate and in any event, is not made out on the evidence.

502. In respect of the Dawson parties, the unconscionability claims all fail for the same reasons the claim in general law fails. There was no contact and no knowledge of the alleged special disadvantage. Additionally there was no pleading or evidence that anything done by the Dawson parties corresponded with any of the prohibitions provided for in the statutory framework.

503. In respect of the Dib parties, any claim under the ASIC Act and the Australian Consumer Law must fail because Adam and Gus Dib supplied no “goods” or “services” to Ms McDonagh or McDonagh Management.

504. I accept that Greg Huxley requested Adam to prepare certain documents and that Greg Huxley then emailed them to Mr McDonnell. Even on Ms McDonagh’s account, Greg Huxley was not present during the explanation of those documents or their signing by her. There is nothing in Mr Huxley’s conduct established on the evidence that demonstrated that he was providing “financial services” or “goods or services” within the meaning of the legislation. There is also no evidence that either Vangory Services or Vangory Holdings did anything at all in that regard.

505. In relation to Mr Spencer, who did not appear and was not represented at the hearing, there is insufficient particularity in the Further Amended Statement of Claim as to what it is alleged he did, and insufficient evidence as to what he in fact did in respect of the transactions, (other than as guarantor and signing the documents as director of Beechworth and Griffith), that would allow a conclusion to be reached that he engaged in conduct corresponding to the statutory descriptions and definitions. The claims against him as guarantor have been abandoned, and relief is not sought against Griffith or Beechworth directly, no doubt because of their financial difficulties spoken about in the August 2014 Deloitte S439A Reports.

Counts 11, 13, and 14 to 18: Corporations Act

506. Count 11 is based on s 1041H of the Corporations Act:

1041H Misleading or deceptive conduct (civil liability only)

(1)   A person must not, in this jurisdiction, engage in conduct, in relation to a financial product or a financial service, that is misleading or deceptive or is likely to mislead or deceive.

(2)   The reference in subsection (1) to engaging in conduct in relation to a financial product includes (but is not limited to) any of the following:

(a)   dealing in a financial product;

(b)   without limiting paragraph (a):

(i)   issuing a financial product;

(ii)   publishing a notice in relation to a financial product;

(iii)   making, or making an evaluation of, an offer under a takeover bid or a recommendation relating to such an offer;

(iv)   applying to become a standard employer‑sponsor (within the meaning of the Superannuation Industry (Supervision) Act 1993) of a superannuation entity (within the meaning of that Act);

(v)   permitting a person to become a standard employer‑sponsor (within the meaning of the Superannuation Industry (Supervision) Act 1993) of a superannuation entity (within the meaning of that Act);

(vi)   a trustee of a superannuation entity (within the meaning of the Superannuation Industry (Supervision) Act 1993) dealing with a beneficiary of that entity as such a beneficiary;

(vii)   a trustee of a superannuation entity (within the meaning of the Superannuation Industry (Supervision) Act 1993) dealing with an employer‑sponsor (within the meaning of that Act), or an associate (within the meaning of that Act) of an employer‑sponsor, of that entity as such an employer‑sponsor or associate;

(viii)   applying, on behalf of an employee (within the meaning of the Retirement Savings Accounts Act 1997), for the employee to become the holder of an RSA product;

(ix)   an RSA provider (within the meaning of the Retirement Savings Accounts Act 1997) dealing with an employer

(within the meaning of that Act), or an associate (within the meaning of that Act) of an employer, who makes an application, on behalf of an employee (within the meaning of that Act) of the employer, for the employee to become the holder of an RSA product, as such an employer;

(x)   carrying on negotiations, or making arrangements, or doing any other act, preparatory to, or in any way related to, an activity covered by any of subparagraphs (i) to (ix).

(3)   Conduct:

(a)   that contravenes:

(i)   section 670A (misleading or deceptive takeover document); or

(ii)   section 728 (misleading or deceptive fundraising            document); or

(iia)   section 738Y (other liabilities relating to defective CSF offer documents); or

(iii)   section 1021NA, 1021NB or 1021NC; or

(b)   in relation to a disclosure document or statement within the meaning of section 953A; or

(c)   in relation to a disclosure document or statement within the meaning of section 1022A;

does not contravene subsection (1). For this purpose, conduct contravenes the provision even if the conduct does not constitute an offence, or does not lead to any liability, because of the availability of a defence.

507. This count proscribes misleading and deceptive conduct in relation to a “financial product” or a “financial service”.

508. Neither the pleadings, nor the plaintiffs’ written submissions, grapple with whether the conduct of any of the defendants was in relation to a “financial product” or a “financial service”. How the conduct complained of was in relation to “financial product” or a “financial service” is simply glossed over.

509. The definition of a “financial product” is in Subdiv B of Div 3 of Pt 7.1 of Ch 7 of the Corporations Act, commencing at s 763A. The transactions involving the Plaintiffs are excluded from the definition of a “financial product”:

1. section 765A of the Corporations Act lists items that are not "financial products";

2. section 765A(1 )(h)(i) provides that a credit facility within the meaning of the regulations (other than a margin lending facility) is not a "financial product";

3. regulation 7.1.06(1)(a) of the Corporations Regulations provides that the provision of credit is a credit facility;

4. "credit" is defined regulation 7.1.06(3)(a) as a contract, arrangement of understanding under which:

a. payment of a debt owed by one person (a debtor) to another person (a credit provider) is deferred; or

b. one person (a debtor) incurs a deferred debt to another person (a credit provider) is deferred.

5. the transactions entered into by the Plaintiffs are loans between Beechworth and Griffith as debtors and the Plaintiffs as credit providers;

6. it follows that the transactions entered into by the Plaintiffs are not financial products.

510. The definition of a “financial service” is set out in Div 4 of Pt 7.1 of Ch 7 of the Corporations Act. Section 766A(1) provides the starting point, with reference to other provisions of the Corporations Act and regulations, as follows:

1. For the purposes of this Chapter, subject to paragraph (2)(b), a person provides a financial service if they:

1. provide financial product advice (see section 766B); or

2. deal in a financial product (see section 766C); or

3. make a market for a financial product (see section 766D); or

4. operate a registered scheme; or

5. provide a custodial or depository service (see section 766E); or

6. engage in conduct of a kind prescribed by regulations made for the purposes of this paragraph.

511. Sub-section (2)(b) provides that the regulations may set out the circumstances in which persons are taken to provide, or are taken not to provide, a financial service.

512. The alleged conduct of the defendants did not constitute the provision of a financial service within the terms of s 766A of the Corporations Act for the following reasons:

1. the alleged conduct of the defendants was not the provision of financial product advice under s 766A(1)(a) as s 766B requires a recommendation or opinion intended to influence the decision of someone in relation to a “financial product” and, for the reasons detailed above, the transactions entered into by the Plaintiffs were not financial products;

2. the alleged conduct of the defendants was not the provision of financial product advice under s 766A(1)(b) as s 766C requires the dealing in a “financial product” and, for the reasons detailed above, the transactions entered into by the Plaintiffs were not financial products;

3. the alleged conduct of the defendants was not the provision of financial product advice under s 766A(1)(c) as s 766D requires the creation of a market in relation to a "financial product" and, for the reasons detailed above, the transactions entered into by the Plaintiffs were not financial products;

4. the alleged conduct of the defendants was not the provision of financial product advice under s 766A(1)(d) as the transactions entered into by the Plaintiffs did not involve a "registered scheme" - the definition of that term in s 9 is a managed investment scheme registered under s 601EB and there is no evidence, or even allegation, of there being a relevant registered managed investment scheme;

5. the alleged conduct of the defendants was not the provision of financial product advice under s 766A(1)(e) as s 766E requires a custodial or depository service whereby a financial product is held upon trust for another and, for the reasons detailed above, the transactions entered into by the Plaintiffs were not financial products;

6. there is no conduct prescribed by the regulations for the purposes of s 766A(1)(f);

7. there are no regulations setting out the circumstances in which persons are taken to provide, or are taken not to provide, a financial service under s 766A(2)(b).

513. The claim in respect of contravention of s 1041H of the Corporations Act is thus also fundamentally misconceived.

514. Count 13 is based on allegations of “aid and abet, counsel or procure” under the Corporations Act but is fatally flawed for a number of reasons.

515. It is expressed to be under s 1324 of the Corporations Act and pleads that, “by reason of the facts and circumstances set out in pars 1 to 69”, the defendants, and each of them aided, abetted, counselled or procured the contravention of the Corporations Act. This is not an adequate identification of the principal conduct.

516. It is in any event unnecessary to delve into the detail and merits of what contravention(s) of the Corporations Act there were, or by whom, or what they did to aid, abet, counsel or procure the contravention, because this claim fails at the threshold level.

517. In the plaintiffs’ written submissions (par 324), reference is made to the thirteenth count as being a “jurisdictional power to award damages where there has been conduct or contravention”.

518. Section 1324(1) of the Corporations Act gives power to the Court to grant an injunction against a person who has engaged, is engaging, or proposed to engage in a contravention of the Act or being involved in a contravention of the Act by another person.

519. Section 1324(10) gives the Court discretion to order the person who is, or would otherwise be, the subject of the injunction, to pay damages to any other person.

520. Damages under s 1324(10) of the Corporations Act can only be awarded in proceedings where an injunction is actually sought: Polon v Dorian [2014] NSWSC 571 at [787] - [800].

521. By reason of the filing of the Further Amended Statement of Claim, the plaintiffs no longer seek an injunction against anyone. It follows that the Court cannot award damages under s 1324(10) of the Corporations Act. This count also fails.

522. Count 14 asserted that Greg Huxley, Vanessa Huxley and Rory McDonnell breached s 911A of the Corporations Act for “carrying on a financial services business without an Australian Financial Services licence”. Section 911A provides that a person who carries on a financial services business in this jurisdiction, must hold an Australian financial services licence covering the provision of the financial services. It then goes on to provide a long list of exemptions.

523. There is no basis upon which to conclude Vanessa Huxley or Greg Huxley were carrying on such a business, although Rory McDonnell may well have been. However, he is not an active defendant, judgment having been entered against him in 2016, and I have not been asked to make any findings about him. In any event, the pleading does not sufficiently identify the basis upon which I would reach this conclusion.

524. Count 15 asserted that there were false and misleading statements by Greg Huxley, Rory McDonnell, Vanessa Huxley, Adam, Mr Spencer and Gus Dib in breach of s 1041E of the Corporations Act:

1041E False or misleading statements

(1)   A person must not (whether in this jurisdiction or elsewhere) make a statement, or disseminate information, if:

(a)   the statement or information is false in a material particular or is materially misleading; and

(b)   the statement or information is likely:

(i)   to induce persons in this jurisdiction to apply for financial products; or

(ii)   to induce persons in this jurisdiction to dispose of or acquire financial products; or

(iii)   to have the effect of increasing, reducing, maintaining or stabilising the price for trading in financial products on a financial market operated in this jurisdiction; and

(c)   when the person makes the statement, or disseminates the information:

(i)   the person does not care whether the statement or information is true or false; or

(ii)   the person knows, or ought reasonably to have known, that the statement or information is false in a material particular or is materially misleading.

(2)   For the purposes of the application of the Criminal Code in relation to an offence based on subsection (1), paragraph (1)(a) is a physical element, the fault element for which is as specified in paragraph (1)(c).

(3)   For the purposes of an offence based on subsection (1), strict liability applies to subparagraphs (1)(b)(i), (ii) and (iii).

525. Again, this count requires activity in relation to “financial products”. This count fails for the same reason as count eleven.

526. Count 16 asserts that there was inducement, on the part of Greg Huxley, Vanessa Huxley, Rory McDonnell, Mr Spencer, Adam and Gus Dub in breach of s 1041F, to deal with financial products:

1041F Inducing persons to deal

(1)   A person must not, in this jurisdiction, induce another person to deal in financial products:

(a)   by making or publishing a statement, promise or forecast if the person knows, or is reckless as to whether, the statement is misleading, false or deceptive; or

(b)   by a dishonest concealment of material facts; or

(c)   by recording or storing information that the person knows to be false or misleading in a material particular or materially misleading if:

(i)   the information is recorded or stored in, or by means of, a mechanical, electronic or other device; and

(ii)   when the information was so recorded or stored, the person had reasonable grounds for expecting that it would be available to the other person, or a class of persons that includes the other person.

(2)   In this section:

dishonest means:

(a)   dishonest according to the standards of ordinary people; and

(b)   known by the person to be dishonest according to the standards of ordinary people.

(3)This section applies in relation to the following conduct as if that conduct were dealing in financial products:

(a)   applying to become a standard employer‑sponsor (within the meaning of the Superannuation Industry (Supervision) Act 1993) of a superannuation entity (within the meaning of that Act);

(b)   permitting a person to become a standard employer‑sponsor (within the meaning of the Superannuation Industry (Supervision) Act 1993) of a superannuation entity (within the meaning of that Act);

(c)   applying, on behalf of an employee (within the meaning of the Retirement Savings Accounts Act 1997), for the employee to become the holder of an RSA product.

527. This count too fails on the same basis as count eleven.

528. Count 17 is based on s 1041G:

1041G Dishonest conduct

(1)   A person must not, in the course of carrying on a financial services business in this jurisdiction, engage in dishonest conduct in relation to a financial product or financial service.

(2)   In this section:

dishonest means:

(a)   dishonest according to the standards of ordinary people; and

(b)   known by the person to be dishonest according to the standards of ordinary people.

529. The only defendant who could be said to be “carrying on a financial service business” is Rory McDonnell and he is not an active defendant. In any event, the pleadings do not address the necessary components with sufficient particularity to allow a conclusion to be reached that he was dealing with a “financial product” or “financial service” as defined.

530. Count 18, although pleaded as a “count”, is simply a damages provision:

1041I Civil action for loss or damage for contravention of sections 1041E to 1041H

(1) A person who suffers loss or damage by conduct of another person that was engaged in in contravention of section 1041E, 1041F, 1041G or 1041H may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention, whether or not that other person or any person involved in the contravention has been convicted of an offence in respect of the contravention.

(1A)   Subsection (1) has effect subject to section 1044B.

(1B)   Despite subsection (1), if:

 (a)   a person (the claimant) makes a claim under subsection (1) in relation to:

(i)   economic loss; or

(ii)   damage to property;

           caused by conduct of another person (the defendant) that was done in contravention of section 1041H; and

(b)   the claimant suffered the loss or damage:

                (i)   as a result partly of the claimant’s failure to take reasonable care; and

                (ii)   as a result partly of the conduct referred to in paragraph (a); and

(c)   the defendant:

(i)   did not intend to cause the loss or damage; and

(ii)   did not fraudulently cause the loss or damage;

    the damages that the claimant may recover in relation to the loss or damage are to be reduced to the extent to which the court thinks 

    just and equitable having regard to the claimant’s share in the responsibility for the loss or damage.

(2)   An action under subsection (1) may be begun at any time within 6 years after the day on which the cause of action arose.

(3)   This section does not affect any liability that a person has under any other law.

(4)   Section 1317S (which provides for relief from liability) applies in relation to liability under subsection (1) as if:

(a)   the sections referred to in subsection (1) were civil penalty provisions; and

​​​​​          (b)   proceedings under subsection (1) were eligible proceedings.

531. Section 1041I of the Corporations Act refers only to contraventions of ss 1041E, 1041F, 1041G and 1041H. To the extent that Further Amended Statement of Claim (par 94) refers to contraventions of ss 911A, 777C [sic: 766C] and 1324, the claim for damages under s 1041I in respect of those contraventions is fundamentally misconceived.

532. Under ss 1041E, 1041F and 1041G, the relevant conduct proscribed concerns “financial products” and “financial services”. The claims based upon contraventions of these provisions are fundamentally misconceived for the same reason as the claim under s1041H, the eleventh count.

Count 19: Negligent Misstatement

533. Count 19 alleges that there was negligent misstatement on the part of Greg Huxley, Vanessa Huxley, Rory McDonnell, Mr Spencer and Gus Dib and Adam. This count also is inadequately pleaded in respects fatal to its success. Negligent misstatement is a tort that requires a pleading of the relationship between the plaintiffs and the alleged tortfeasor(s) and which specifies the consequent duty of care owed. No attempt has been made to formulate any such pleading.

534. To establish damages for negligent misstatement, four conditions have to be met. First, that a fiduciary relationship of trust and confidence arises or exists between the parties, second, that the party preparing the advice or information has voluntarily assumed the risk, third, that there has been reliance on the advice or information by the other party and fourth, that such reliance was reasonable in the circumstances: Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465; [1963] 3 WLR 101; [1963] 2 All ER 575. In this case, none of those four conditions have been satisfied in respect of any of the active defendants identified as liable to the plaintiffs under this count.

535. As I have already concluded, there was no contact either in writing or in person or on the telephone between Adam and Gus Dib and the plaintiffs.

536. A “scattergun” approach has again been used for this allegation, listing a series of asserted misrepresentations, most of which have not been made out on the evidence. It has also not been demonstrated that those specific representations were in fact made, or if they were, by whom and when. A pleading of this nature, in addition to needing to specify the relationship between the plaintiffs and the party said to have engaged in the conduct, requires particularisation as to when and by what means the asserted representations were made. That has not been done and in my view that is fatal to the count alleged.

537. Additionally, as submitted by Mr Lloyd on behalf of the Dib parties, any papers prepared by Dib Lawyers in the form of transactional documents were prepared for the borrower pursuant to a circumscribed retainer with that borrower.

538. With respect to any asserted misrepresentation based on the forwarding of the draft caveat by Adam to Greg Huxley on 28 November 2013 regarding Beechworth, and it being read as a possible representation that Beechworth owned certain lots set out on the final form of the caveat that is in evidence, I make two observations. First, there is no satisfactory evidence as to what the draft caveat comprised when it was emailed by Adam to Greg Huxley. Second, and fatally, this is not one of the particulars of misrepresentation set out in par 96 of the Further Amended Statement of Claim and so must be disregarded.

539. Further, there is no evidence that Adam or Gus Dib voluntarily assumed any risk associated with giving any advice to Ms McDonagh or McDonagh Management. They did not give any advice, much less assume the risk of doing so.

540. As I have already concluded, Ms McDonagh did not believe that Dib Lawyers or anyone at that firm were acting for her. There was no evidence in her lengthy affidavit ^[108] that deposed to reliance or any belief held by her based on anything done or said by Adam or Gus Dib other than a vague reference to being “comforted” by documents that “looked like legal documents”. There was nothing asserted by Mr Dib or Adam to Ms McDonagh that suggested to her that they were carrying out steps to protect her interests. Any impression she may have had to that effect – although I have found she in truth had no such impression – would have been as a result of things she was told by others.

     108. Exhibit D, Affidavit, Sharon McDonagh dated 23 June 2016

541. As submitted by Mr Lloyd, there are further problems with recognition of any duty owed of this nature by Adam and/or Gus Dib to the plaintiffs and that is foreseeability of economic loss as a necessary condition for the existence of a duty of care. I accept that Adam and Gus Dib exercised no control at all over Ms McDonagh’s ability to obtain legal advice about the transactions and there is no evidence at all to suggest that Adam or Gus Dib were ever aware that McDonagh Management or Ms McDonagh were not advised by a lawyer about the transactions.

542. The sending of transactional documents in draft to a client by a solicitor does not involve the solicitor who has prepared the documents in making any representation to the other party in the transaction. This has been demonstrated by a number of decisions including Argy v Blunts (1990) 94 ALR 719; [1990] FCA 57.

543. The reliance by Mr Goodridge on Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592; [2004] HCA 60 is irrelevant and misplaced given the circumstances always require specific analysis of the relationships between the relevant parties to the asserted misrepresentation before any conclusion can be reached as to liability for any such misrepresentation.

544. An additional problem with the pleading in respect of all the defendants against whom it is levelled, is that it contains nothing more than a list of assertions headed “particulars of misrepresentation” without any explanation as to how those matters support a claim. The claim fails.

Count 20: Deceit

545. Count 20 alleges the tort of deceit against Greg Huxley, Vanessa Huxley, Rory McDonnell and Mr Spencer.

546. This allegation is in effect an allegation of fraud, and as I have already observed, allegations of this type attract a serious onus of pleading, particularisation and proof. The Briginshaw standard of proof applies and I have exercised the necessary care before drawing the adverse inferences contended for by the plaintiffs.

547. Again, the plaintiffs have sought to accomplish particularisation of this count by a scattergun series of propositions thrown down under a heading. Again, I have concluded that this is an inadequate and unsatisfactory approach to a pleading of this nature, where multiple persons are said to have engaged in the conduct and the times at which these incidents of deceit were engaged in by each of them has not been identified, other than to say it was before or at the time that the loan documents were signed.

548. I am not satisfied that the plaintiffs have demonstrated to the required standard of proof that there was any knowledge of, or intention to, conceal or defraud the plaintiffs regarding the nature of the investment in the Beechworth and Griffith projects in the ways listed, on the part of Greg Huxley or Vanessa Huxley or Rory McDonnell or Mr Spencer. Further and significantly, the alleged insolvency of Beechworth and Griffith at the time Ms McDonagh executed the loan documents has not been demonstrated.

549. This count fails.

Count 21: Exemplary damages

550. Count 21 comprises a claim for exemplary damages, now confined to Greg Huxley and Rory McDonnell. The pleading is inadequate, simply referencing “the facts set out in pars 1 - 70” of the lengthy Further Amended Statement of Claim as providing a basis, baldly asserting “conscious and contumelious disregard for the plaintiffs’ rights” and “to deter them from committing like conduct again”. This count is dismissed due to both inadequate particularisation of the basis of the claim and the absence of evidence that would justify any such evaluation of the conduct of either Rory McDonnell or Greg Huxley.

Count 22 – Admission and Guarantee

551. Count 22 comprises a vague pleading of admission and guarantee against Greg Huxley arising out of his 19 June 2014 email to Ms McDonagh.

552. It is claimed that the representations were “intended to mislead and deceive” the plaintiffs and caused them “not to seek legal redress against the defendants and the assets of Griffith and Beechworth at an earlier time”.

553. I accept Mr Ball’s submission on behalf of Mr Huxley that the pleading is in effect one of fraud and so attracts a high standard of pleading, particularisation and persuasion on the evidence.

554. In my view, there is no evidence to suggest that the email is anything but an apology. The fraudulent intent ascribed is unclear and not made out on the evidence.

555. The steps alleged to have been available to avoid or lessen damage, (as at 19 June 2014), are not disclosed, nor is it at all clear how the email “caused” any damage. Ms McDonagh’s affidavit although it refers to having seen the letter, says nothing at all about its effect on her conduct or instructions to Firths. It seems the letter actually was utilised by Firths, the solicitors retained by the plaintiffs, as a basis for a request to Mr Huxley on 1 August 2014 assist them and the plaintiffs to the extent he was able. This count also fails as it is not supported by evidence and goes nowhere in terms of causation of any identified loss.

Default Judgment enter in 2016 against the second and fourth defendants

556. Judgments were entered on 19 February 2016 by Registrar Bradford against the second and fourth defendant. I have not been asked to make any further orders in respect of those judgments.

Orders

557. It follows that all of the causes of action claimed fail and are thus dismissed, and I make orders as follows:

1. By consent, verdict and judgment for the fifth defendant as against the plaintiffs.

2. Verdict and judgment for the first defendant as against the plaintiffs.

3. Verdict and judgment for the third defendant as against the plaintiffs.

4. Verdict and judgment for the sixth defendant as against the plaintiffs.

5. Verdict and judgment for the seventh defendant as against the plaintiffs.

6. Verdict and judgment for the eighth defendant as against the plaintiffs.

7. Verdict and judgment for the ninth defendant as against the plaintiffs.

8. Verdict and judgment for the tenth defendant as against the plaintiffs.

9. Verdict and judgment for the eleventh defendant as against the plaintiffs.

10. The parties are to file and serve any affidavit evidence and outline of written submissions in support of any costs order it, he or she seeks, on or before 27 August 2021, with a copy to be provided by email to my Associate.

11. Any affidavit in reply or submissions in reply are to be filed and served on or before 13 September 2021, with a copy to be provided by email to my Associate.

12. If the plaintiffs wish to be heard in relation to any application they wish to make regarding the default judgments entered against the second and fourth defendants, they should provide notice in writing of any such application by email to my Associate, with a copy to be served upon the defendants and in particular, the second and fourth defendants at their last known street and email address, on or before 27 August 2021.

13. The proceedings are listed for further directions before me at 9:00am on 16 September 2021.

**********

Endnotes

Amendments

13 August 2021 - • Corrections at various places to the misspelling of the surname of the first plaintiff;

• 12.3 - 2018 not 2020;

• 30.4 - employment not employers;

• 93.1 - “ was”not is;

• 160.3 - Griffith not Beechworth;

• 166.2 - “a” solicitor not “the” solicitor;

• 203.3 - comma after “individuals”;

• 206.11 - the word “resulted” is removed;

• 238.2 - directory corrected to “ director”;

• 293.3 and 6 – misspelling of Trovas corrected;

• 299.7- removed extra “and denied”

• 322.2 - editing error in line 2 to read consistently with para 356 “ by denying the rolled up allegation”

• 322.2 - editing error : add at the end of the sentence “ and that folders of documents were presented by them to the plaintiffs”.

• 374.5 - Ms McDonagh ( not “her”).

• 385.1 - editing error - line 1 commences with : “ I note that this was”

• 449.4 - insert “ had” before “ forgotten”

• 460.7 - remove “in” before the word “that” and insert “the” before “transaction”

• 463.2 and 464.1- editing error: “between Ms McDonagh and Rory” not “by Ms McDonagh to Rory..”

• 538.3 - comma at the end of the line removed.

16 August 2021 - • 12.2 - “Lillas & Loel Lawyers” not Kent Attorneys

• 12.4 & Cover sheet - “Katsoulas” not Katsoulos

Decision last updated: 16 August 2021